President & CEO, Director Naoto Matsuoka

In the three years since Metal One's establishment in January 2003, the company promoted the harmonization of its organization and human resources and consolidated its foundations under the three main pillars of its first Mid-term Consolidated Management Plan to benefit from the synergistic effect of the merger. The three main pillars are post-merger integration, or PMI (reassessing functions and structures in addition to merging and restructuring Group companies); business process integration/innovation, or BPI (drastic operational reforms); and business model creation for growth.
Fortunately, we were blessed by a global economic boom. China was the driving force behind the rise in world crude steel production, from 970 million to 1.13 billion tonnes, and Metal One's business expanded substantially.
During this period, in 2005, we restructured our business departments into divisions in pursuit of dynamic, flexible management strategies and business activities. The following year, in 2006, we reorganized and strengthened our administrative divisions.

We went on to build global value chains based on the dual pillars of value chain strategies and group management strategies under the second Mid-term Consolidated Management Plan.
Global crude steel production expanded to 1.34 billion tonnes in 2007 (China accounted for 36 percent [490 million tonnes] of this). In the previous year, 2006, the industry was shaken when the world's top two steel companies merged to form Arcelor Mittal, a giant steelmaker with 120 million tonnes in annual crude steel production capacity. Tight supply and demand led to higher steel product prices, and Metal One continued to perform well.

The US financial crisis that broke out in September 2008, triggered primarily by problems with subprime mortgages, had massive repercussions for the real economy and eventually sparked a global recession.
In the midst of these unprecedented upheavals in the business environment, we intensified our value model development and began cocreating group management as part of our management policies under the third Mid-term Consolidated Management Plan. We also promoted two strategies—survival strategies as well as growth strategies—with the latter designed to create future core businesses.
In addition, we restructured our organization in October 2009, forming five business divisions grouped by partner industry.

The Great East Japan Earthquake on March 11 last year and the Fukushima Daiichi Nuclear Power Station accident that followed occurred while the recovery from the 2008 financial crisis was still ongoing, as did the fall flooding that hit Thailand. Both of these events greatly affected steel demand. Additionally, a substantially stronger yen, concerns regarding customers shifting production overseas, continuing high raw materials costs, intensifying competition in East Asia due to major increases in capacity at Chinese and Korean mills, and other structural changes related to the steel industry manifested themselves.
Regarding economies around the world in 2012, Japan and the United States are expected to grow slightly, but Europe will lag, burdened by the debt crisis. The expectation is that this will in turn slow emerging economies down. In the midst of this, in October Nippon Steel Corporation will merge its business with that of Sumitomo Metal Industries, Ltd., and Nisshin Steel Co., Ltd. will merge with Nippon Metal Industry Co., Ltd.

In the midst of this environment, Metal One reorganized its five business divisions into four in April 2012, aiming to improve its responsiveness to target markets in Japan and overseas. Under our soon-to-be-announced fourth Mid-term Consolidated Management Plan, we will be restructuring to strengthen our domestic operations and promoting strategic initiatives in our overseas operations. Furthermore, we will employ the global networks of our shareholding companies (Mitsubishi Corporation and Sojitz Corporation), utilize our broad spectrum of business fields, and regiment the Metal One Group's overall capabilities to update and increase our own functions, business models, and services in response to the requirements of the times.
Also, we will continually devote efforts to raise the satisfaction of our customers and business partners in Japan and overseas, endeavoring to be the world's strongest integrated steel trading company with an overwhelming market presence.
Additionally, grounding all the Group's activities in our corporate philosophy, we will strengthen our corporate social responsibility efforts and internal controls with a focus on compliance and global environmental considerations and will strive to be a sustainable and excellent company that contributes to and is respected by society.

President & CEO, Director

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